The housing sector in Iraq suffers from major deficiencies, namely a massive housing shortfall, widespread lack of housing finance, an obsolete and ineffective delivery system, an outdated and non-functional policy and institutional framework, and the lack of reliable baseline information. In addition, the construction and building materials industry lacks capacity and modern technical and managerial features. This is compounded by inappropriate land and infrastructure policies and systems, as well as restrictive, centralized, and non-inclusive planning regimes. The progressive influx of returning refugees and the persistent problem of IDPs puts an additional strain on the already urgent situation.

The project started in late 2004 and will be completed in mid-2006. It has so far not only achieved to put the housing sector at the centre of Iraq's National Development Agenda, but has also undertaken a massive and successful programme of training, capacity building, and policy dialogue. To date some 250 people have received a total of 360 person-weeks of training and $1.4 million worth of Electronic Data Processing equipment has been handed over to the Ministry of Construction and Housing.

The project is assisting the Ministry with the much-needed formulation of a housing finance strategy. The project has also been instrumental in catalysing Iraqi efforts to achieve MDG 7, Target 11 by supporting the development of a Slum Upgrading Strategy and having the government allocate a sizeable financial allocation from its budget for 2005 and 2006 to slum upgrading. In addition, the project has started a comprehensive collection of critical baseline data to inform the housing and housing finance sectors (the Housing Market Study).